020 7898 0500The UK budget did nothing to stop sterling’s downward trend. This is the first of two budgets for 2017. Many of the changes were already forecast and signposted through the 2016 autumn statement and Whitehall leaks over the weekend. The market was very keen to find out the government’s view on the UK economy.
The Chancellor highlighted that the UK economy was the second fastest growing economy in the G7 for 2016. He believes that it can continue this trend for 2017.
The 2017 growth forecast was upgraded to 2% from 1.4% but growth was downgraded for the following three years. The government sees inflation increasing to 2.4% in 2017/18, which undershoots the Bank of England forecast.
In terms of key pledges, the personal tax-free allowance is set to rise as planned to £11,500 this year and £12,500 by 2020. It was also stated that national insurance contributions will rise for the self-employed. Chancellor Hammond stated that he would make ‘no apology’ for raising extra money through taxation, ‘in ways which enhance the fairness of the system.’
With no data set for release today, the focus will revert back onto Brexit, while the market continues to decipher the implications of this budget on the UK economy.
